Payday loan businesses subject to extra restrictions, fees in Roeland Park

Payday loan businesses in Roeland Park are limited by separation provisions.
Payday loan businesses in Roeland Park are limited by separation provisions.

In Roeland Park payday loan companies face the highest fees and some strict regulation compared to other types of businesses in the city.

This week the city council reviewed an update on its fee structure that includes charges for reports, inspections, building permits, franchise fees and business licenses among others. Few of the fees will be changing, but some modest modifications are anticipated.

The most expensive of the business license fees is that for payday loan businesses. The city charges $1,000 per year for that license while the next highest category is for an entertainment license under the adult business category. That costs $250 per year.

But it is not that Roeland Park is trying to make money on payday loan fees by raking in cash from multiple businesses. In fact, Roeland Park city code effectively limits the number of payday loan businesses that can operate in the city to one. While that restriction is not explicit, a separation requirement in the code makes it difficult to have more than one such business operating.

The code requires a separation of 5,280 feet – one full mile – between payday loan or title loan businesses within the city. It also requires that a payday loan business cannot operate within 200 feet of any property “used primarily for a single-family residence, a two-family residence, a town home, or an apartment building. The two separation requirements make it difficult, if not impossible, for multiple operations in the city.

One payday loan company operates in the shops along Roe Avenue near the Walmart. Nearby on Mission’s Johnson Drive, three of the loan businesses have storefronts, two within close proximity east of Nall.

If there is any doubt about the city’s intent through its regulations, the code also spells out the philosophy – going back years – toward the businesses:

“These businesses should be regulated by the City because certain payday and title loan lending practices have proven detrimental to the financial security of individuals and families residing in the City. Payday and title loan lending practices often have an unreasonably adverse effect upon the elderly, the economically disadvantaged and other residents of the City. Frequently, taking a payday or title loan puts borrowers in much worse financial shape than before they took the loan. Therefore, the purpose of this ordinance is to require licensing for the purpose of regulating certain payday and title loan lending practices to minimize the detrimental effects of such practices on the citizens of the City by regulating payday and title loan lending practices occurring in the City, consistent with the laws of the State of Kansas.”

And as for the separation requirement, the code gives more specific thought about the reason:

“A clustering of these businesses can have a detrimental effect on the neighborhood and create the appearance of a commercial district in decline. These businesses do not create much foot traffic for adjacent businesses and a proliferation of them at particular locations can overwhelm a neighborhood and can be a disincentive for the location of other neighborhood businesses in close proximity to them.”